Amazon may wade into India's crowded music streaming market by early next year

The planned launch of the Prime music service follows the introduction last year of Amazon’s video streaming service in India, for which the company has allotted Rs 2,000 croreShashwati Shankar | ET Bureau | March 21, 2017, 09:22 IST

Amazon is preparing to wade into India’s crowded music streaming market by early next year and is in discussions with record labels including T-Series to acquire music rights, according to several production firm executives aware of the developments. Amazon Prime Music, launched in the United States in 2014 as an add-on to Amazon’s video streaming service, will compete with music streaming apps Saavn, Gaana and Apple Music in India. It is independent of Amazon Music Unlimited that was launched in October with a catalogue of millions of songs; this isn’t available in India.

The planned launch of the Prime music service follows the introduction last year of Amazon’s video streaming service in India, for which the company has allotted Rs 2,000 crore.

Amazon has “acquired our film rights for the coming three years as a part of their Amazon Prime Video service. They are coming up with the music service next year, so they are taking our catalogue for their music service,” said Bhushan Kumar, managing director at T-Series.

“It’s non-exclusive rights, just like we have given to the other music streaming platforms like Saavn, Gaana, Apple iTunes, and so on, for a specific time period... could be two-three years,” he said.

Amazon India declined comment for this report.

Analysts expect that Amazon, like with its video service, will invest heavily to stand out in India’s competitive but relatively small music streaming market, where companies are blurring the lines with record labels by launching their own artists and entertainment shows.

Internationally, Amazon Prime Music hasn’t specifically looked at music content but in India, the analysts say, it cannot afford to ignore the domestic content market because of the huge number of potential users.

According to a Deloitte report in 2016, about 273 million Indians are expected to listen to music online and drive revenues for the domestic digital music industry beyond Rs 3,100 crore by fiscal year 2020.

Amazon Prime Music will likely “look at investing in music review shows, probably launching independent artists, besides buying music rights from all the top music record labels,” said an analyst on condition of anonymity. “We can expect them to shake up the market with competitive pricing and exclusive offers. Plus, they will leverage upon their existing user base through Prime Video and ecommerce.”

Gaana, which has about 28 million monthly active users, is already preparing to introduce two artists in the next two months.

“We are working on two broad areas,” said Prashan Agarwal, chief operating officer at Gaana.com, a division of Times Internet, the digital arm of The Times Group that publishes The Economic Times.

“One is creating music content, like Asha Bhonsle’s show giving music reviews, Shankar Mahadevan discovering hidden gems, albums that didn’t get enough recognition,” Agarwal said. “The other is an experimental side where we internally pick budding musicians and launch their careers through our platform. We will collaborate with labels but these artists’ music will be exclusively available only on Gaana.”

Saavn, which has about 20 million monthly active users, named musician Raghu Dixit as its Artist-in-Residence last year, and in February, introduced Artist Originals, a programme to produce and distribute music created by independent artists. It has so far released an album by electronic DJ Nucleya and a song by rapper Naezy.

Gaana’s paid version is priced at Rs 99 a month, and Saavn’s at Rs 120 a month.

Globally, Amazon Prime Music offers ad-free curated playlists and personalised stations with offline playback and access to weekly music releases. In October, Amazon launched a full-fledged music streaming service called Amazon Music Unlimited with subscriptions as low as $3.99 per month for owners of its Amazon Echo speakers.

For access beyond Echo, Amazon offers Music Unlimited at $7.99 a month for members of Amazon’s Prime shipping and video service. While Amazon Prime Music currently offers 2 million songs, Amazon Music Unlimited says it has “tens of millions” of songs.

Amazon Music’s rival Apple Music has already entered the original content market with television shows like Apple’s Carpool Karaoke Show. Apple Music has also released albums in the United States, including Chance the Rapper’s album Coloring Book, directly through its music streaming service and without any record label being involved.

In India, Apple Music, which charges Rs 120 a month for individual membership services after a three-month free trial, has up to 400,000 subscribers.